Marcos Bulgheroni drew an optimistic diagnosis of the energy sector in Argentina and analyzed numerous concepts linked to LNG.
Pan American Energy CEO Marcos Bulgheroni He assured this Wednesday that Argentina’s energy sector supports the Government’s economic programwhile highlighting the measures that aimed to lower inflation, the fiscal deficit and the rebalancing of prices. The manager made his presentation to a large audience of investors at the event “The future of business in the Southern Cone of Latin America”organized by Puente and The Economist in Rural.
Also part of the panel were Rolando Figueroa, Governor of Neuquén, Catherine Remy, General Director of TotalEnergies Argentina and Coen Weddepohl, Business Development Manager, Americas, Schroders Greencoat.
Bulgheroni pointed out that “unconventional oil and gas production in the country represents 60% of gas production and a little more than 50% of Argentina’s oil production” and that “Without a doubt this is the result of the industry’s sustained investment over time.”
In this sense, he said that “sustained investment over time is based on trust” and that “In the industry we recognize, see and support this government vision of stabilizing the Argentine macro”. At the same time, he highlighted the policies of President Javier Milei to reduce the deficit “which was unsustainable,” and praised “the drop in inflation that we have seen in recent months and also the rebalancing of essential macro prices of the economy.”
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“I do not want to minimize with this the effort that the entire Argentine society is making regarding these policies, but in order for us to have an environment of sustained investment over time we need to organize the macroeconomy,” said the executive. “In this sense, the basic law that was approved a few months ago, the RIGI, a regulatory framework that gives perspective over time, support for private property, all these things are being regulated today (the basic law) and it is important “That we do it quickly to give clear signals that allow us to maintain this investment path and particularly that the signals are adequate to encourage production, investment, supply of the internal refining system, exports and the industrialization of oil and gas,” said.
Asked about the development of the market Natural Gas and Liquefied Natural Gas In Argentina, to join the global market as a relevant player, Bulgheroni expressed himself with various concepts:
- Over the last few years, PAE has invested around 1.5 billion dollars a year, maintaining a production of around 250 thousand barrels of oil and gas per day, impacting more than 20,000 families directly and indirectly.
- This investment is part of the effort that the industry has made to increase production and gradually replace imports of LNG and gas from Bolivia. Starting next year, imports will only be linked to seasonal needs.
- The industry has also invested billions of dollars in gas pipeline infrastructure that in the coming years will allow gas molecules, particularly from Vaca Muerta, to be placed on the borders of Mercosur, Chile and Bolivia and thus have the possibility of implementing a ring that connects VM to the entire Southern Cone.
- This will give us the possibility, specifically, of rebalancing the trade balance between Argentina and Brazil.
- When we can sell to Brazil about 15 MMm3/d equivalent, that is, 10 via gas pipeline and 5 through LNG in a sustainable manner over time, we would have a radical change in the trade balance. The structural deficit that we have today with the neighboring country would be minimally transformed into a trade surplus of around 500 MUS$. This would determine a change in the economic nature and unites the two countries.
About the prelude to Argentina LNG and other concepts
In the exchange with the other exhibitors, and particularly about LNG, he maintained that “it will not only open the door to Brazil, but it will connect us with the world.” “We took the first steps, we signed a 20-year contract with Golar to bring the Hilli Episeyo ship that we are going to park in Río Negro and that in a first stage we are going to connect to the current gas pipeline system but that later it will probably have a dedicated gas pipeline “, said.
At the same time, he noted:
- The Hilli Episeyo is a plant ship with its own electricity generation capacity, three 2.4 MMTPA cryogenic trains and storage tanks. Although initially the project is being organized by us and Golar, we are in talks with other potential partners to join, including of course YPF, which would be important to enter the consortium.
- Our project is the prelude to Argentina LNG, the great industry project led by YPF. This project would add two more ships that represent another 8/10 MMTPA of LNG. It is a project led by YPF but it will be made up of the entire industry. We are talking to YPF and we intend to enter the consortium. In this way, in the next decade, Argentina could be exporting 11/12 MMTPA of LNG, which represents about 50MMm3/day, and about 8 billion US$, at 10 USD/MMBTU.
- However, NG is a commoditized product where price rules, we have to be efficient and competitive in all stages of production.
- Finally, to this process is also added the possibility of integrating ourselves into the downstream of natural gas, which is electricity generation, to supply the new large demands, which need a reliable and permanent source of energy, such as data centers, cryptocurrency mining or the petrochemical industry.
Source: Ambito
